Friday 28 July 2017

David McWilliams: Time to tell Germans: enough of all this austerity nonsense

German Chancellor Angela Merkel
German Chancellor Angela Merkel

According to the great American economist, JK Galbraith, "the conventional view serves to protect us from the painful job of thinking". The painful job of thinking is what makes the difference between doing the right thing and simply doing the thing that everyone else is doing just because the conventional view concludes that it is right despite mounting evidence to the contrary.

Indeed, Galbraith went one better in summing up why many people refuse to change their views, particularly if they have invested much time, effort and credibility into establishing that view. The following quotation from Galbraith sums up what's happening in the policy making of the insiders in Ireland: "Faced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof."

The conventional view on the Irish economy is that we must stick with the programme and that we must continue to grind down wages and prices, squeeze demand and raise taxes. This we have been told for the past five years is the only way and if we stick to this approach, the economy will rebound vigorously.

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